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The next time you're talking with a group of "informed" investors, bring up the topic of options trading. Before long, someone in your group will cite the supposedly well-known statistic that more than 90% of all options expire worthless.
And most of the other folks will nod in solemn agreement.
Because options have big potential rewards and substantial risks, regulators want us to believe that options are to retail investors what Kryptonite is to Superman.
Because of that, the "90%" stat is presented as trading dogma and is cited over and over and over again – in speeches, in magazines, and in investing analyses of every type.
In fact, I was at a recent conference where a well-known investor quoted the statistic he learned in business school as "98% of all options expire worthless."
There's only one problem.
It's just not true.
In fact, it's one of the biggest investing myths of all time.
I sat down with Money Morning Executive Editor William Patalon, III, to set the record straight – and unleash your maximum profit potential.
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About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.
Tags: options